Case Note & Summary
The appellant, a company incorporated under the Companies Act, 1956, and the respondent, a multi-state co-operative society constituted under the Multi State Cooperative Society Act, 2002, entered into an agreement containing an arbitration clause. Disputes arose between the parties, and the appellant issued a notice invoking arbitration on 10th July 2026, calling upon the respondent to appoint an arbitrator as per the arbitration agreement. The respondent failed to appoint an arbitrator within 30 days of the notice. The appellant then filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, before the High Court of Judicature at Bombay, seeking appointment of an arbitrator. The court considered the submissions of both parties. The appellant argued that the respondent's failure to appoint an arbitrator within the stipulated time entitled the appellant to approach the court. The respondent contended that the pre-arbitration steps, including mutual consultation, were not complied with. The court held that the appellant had substantially complied with the pre-arbitration steps by sending a notice of dispute and waiting for a reasonable period. The respondent's failure to respond and appoint an arbitrator constituted a failure to act under the arbitration agreement. The court allowed the application and appointed a sole arbitrator to adjudicate the disputes between the parties. The judgment was pronounced on 17th July 2026.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11(6) Arbitration and Conciliation Act, 1996 - Failure to Appoint - The appellant issued a notice invoking arbitration and called upon the respondent to appoint an arbitrator as per the arbitration agreement. The respondent did not appoint an arbitrator within 30 days. The court held that the respondent's failure to act entitled the appellant to approach the court under Section 11(6) for appointment of an arbitrator. The court appointed a sole arbitrator to adjudicate the disputes. (Paras 1-4) B) Arbitration Law - Pre-Arbitration Steps - Section 11(6) Arbitration and Conciliation Act, 1996 - Compliance - The arbitration agreement required the parties to attempt settlement through mutual consultation before arbitration. The appellant sent a notice of dispute and waited for a reasonable period. The court found that the pre-arbitration steps were substantially complied with, and the respondent's failure to respond justified the invocation of Section 11(6). (Paras 2-3)
Issue of Consideration
Whether the appellant is entitled to appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, when the respondent failed to appoint an arbitrator within 30 days of the notice invoking arbitration, despite the arbitration agreement providing for a specific procedure.
Final Decision
The court allowed the application and appointed a sole arbitrator to adjudicate the disputes between the parties.
Law Points
- Arbitration agreement
- appointment of arbitrator
- failure to act
- Section 11(6) Arbitration and Conciliation Act
- 1996
- pre-arbitration steps
- notice invoking arbitration
- deemed failure
